Phl slams World Bank after slipping in Doing Business survey

MANILA, Philippines - The Philippines slammed the World Bank on Tuesday after its ranking in an annual gauge of business environment slumped to one of the lowest in Southeast Asia, calling the measure an “inappropriate” reflection of the country’s business climate.

Calling the World Bank-International Finance Corp.’s Doing Business (DB) Report “erratic” and “unsound,” Finance Secretary Cesar Purisima expressed dismay on the country’s five-notch slip to 103rd from 97th in the survey.

Singapore topped the annual rankings.

“The Philippines firmly believes that the Doing Business survey methodology of collecting sample data from one or only two cities makes it inappropriate to present the report as reflective of the state of doing business for an entire economy,” Purisima said in a statement.

“Countries, especially developing ones like the Philippines, will have bright spots of promise in some areas and not in others,” he added.

A case in point is the country’s special economic zones, which the finance chief said are not being captured by the survey. These locators, managed by the Philippine Economic Zone Authority (PEZA), are granted numerous fiscal incentives in their operations.

The World Bank, for its part, has recognized this as one of the “limits” of the survey, which focuses only on each economy’s “largest business city.” Survey questionnaires were sent to businesses in covered areas.

A total of 14,233 respondents participated in the global survey in the latest report. In the Philippines, the survey was conducted in Quezon City.

“With this methodology, the DB survey should be more aptly titled as ‘Doing Business Across Cities’ to provide a better representation of the results of the report,” Purisima said.

Purisima, who is the country’s governor in the World Bank Group, also criticized the survey’s “erratic methodological changes year after year” which tended to affect even the previous years’ results.

An example is the Philippines’ place last year, which changed to 97th in the current report from 95th when it was first reported. The country ranked 134th in 2011, the first full year of the Aquino administration.

For her part, World Bank country director Motoo Konishi said in a briefing the multilateral agency is working with the government to improve the survey’s coverage.

“We continue using the DB program to identify priority areas for reform. Next year’s DB report on the Philippines will expand to include a second city apart from Quezon City,” Konishi said.

“Moreover, we plan to conduct local studies to see how firms not covered by the DB methodology— such as firms in PEZA zones— are able to register, expand and operate in the Philippines,” she added.

This was not the first time Purisima criticized the DB report. During this month’s World Bank meetings in Lima, Peru, the finance chief already called attention to what he called was the survey’s “poor” data gathering.

In contrast to the DB report, the Philippines has posted sustained improvements in another business climate gauge, the World Economic Forum’s Global Competitiveness Index. It consistently rose from 75th in 2011, 65th in 2012, 59th in 2013, 52nd last year and 47th this year.

“We will persevere in rolling out more reforms to boost our competitiveness in various indicators,” Purisima said.